Tài chính doanh nghiệp - Chapter 1: The investment environment

Chapter 1The Investment EnvironmentEssential nature of investmentReduced current consumptionPlanned later consumptionReal AssetsAssets used to produce goods and servicesFinancial AssetsClaims on real assetsInvestments & Financial AssetsRole of Financial Assets and MarketsConsumption TimingAllocation of RiskSeparation of OwnershipCrisis in Corporate GovernanceAccounting ScandalsEnronGlobal CrossingAnalyst ScandalsMerrill LynchInitial Public OfferingsCSFBFinancial System Clients and Their NeedsHousehold SectorPrimary Need: Invest FundsBusiness SectorPrimary Need: Raise FundsGovernment SectorPrimary Need: Raise FundsMeeting the Needs of ParticipantsFinancial IntermediationInvestment BankingFinancial Innovation & DerivativesResponding to Regulation & TaxesTechnology and Delivery of ServiceComputer advancementsOn-line tradingMore complete and timely informationGlobalizationDomestic firms compete in global markets.Performance in regions depends on other regions.Causes additional elements of riskInvestments and InnovationDevelopments in Global MarketsManaging foreign exchangeDiversification to improve performanceInstruments and vehicles continue todevelop.Information and analysis improves.Key Trends - GlobalizationSecuritization & Credit EnhancementOffers opportunities for investors and originatorsChanges in financial institutions and regulationImprovement in information capabilitiesCredit enhancement and its roleKey Trends - SecuritizationServices of Financial IntermediariesBundling and unbundling of cash flowsSlicing and dicing of cash flowsExamples: strips, CMOs, dual purpose funds, principal/interest splitsCollateralized LoansKey Trends - Financial EngineeringGlobalization continues and offers more opportunities.Securitization continues to develop. Continued development of derivatives and exotics.Strong fundamental foundation is critical.Integration of investments & corporate finance.The Future